McWhorter v. McMahan

Where a deed is delivered, in performance of a contract for the sale of land, if the purchaser has any objection to the deed itself, or to the description of the premises therein, or if he objects to accepting the deed upon the ground that the premises are incumbered, it is his duty to make the objection known at the time ; so as to give the vendor an opportunity to obviate it. A contract for the sale of lands is void, unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing and subscribed by the party by whom the sale is to be made, or by his agent lawfully authorized. And where the contract has not been signed either by the vendor or by his agent, it is not binding upon the vendee, although he has subscribed the same. To constitute a valid signing of an executory contract, for the sale of lands, by an agent of the vendor, it is only necessary that such agent be lawfully authorized.to execute the contract; an authority in writing for that purpose is not required by the statute of frauds. Aliter as to conveyances and leases, by which an interest in lands inprmsenti is intended to be conveyed. In such cases the authority of the agent of the vendor who subscribes the eonveyance or lease must be in writing.

This was an appeal by the defendant from a decree of the vice chancellor of the eighth circuit. The bill was filed for the specific performance of a contract for the sale of a store and lot in the village of Westfield, in the county of Chautauque, belonging to the complainants. The agreement was made on the 2d of February, 1839, between the complainants, who were copartners in trade under the name or firm of McWhorter & Baldwin, and the defendant McMahan, who were all present in the store, mentioned in the written contract, when such contract was made. Only one of the complainants, however, signed the written agreement, by subscribing the partnership name thereto, in the presence and with the concurrence of his copartner. The contract was as follows : “ In consideration of two thousand seven hundred and fifty dollars, to be paid to us as hereinafter mentioned, we hereby agree to sell to James McMahan the brick store which we now occupy, together with the lot in rear, or lane, subject to such restrictions as are mentioned in a certain writing passed between Joshua R. Babcock, John McWhorter, Norman Kibbee, Aaron Rumsey, and others, in reference to keeping open a lane as therein mentioned; the said store being fifty-six feet front and rear, and extending to the centre of the walls on each of the sides respectively ; and to be paid for as follows, viz : One-third of the whole amount on the first day of May next, and the other two-thirds in three equal annual payments, with annual interest, and payable on the 1st day of May, 1840, 1841, 1842; a deed to be executed by the selling party within four days, and the said McMahan to give his bond and mortgage for the residue as above mentioned ; the selling party to give possession immediately, or to pay rent at the rate of $225 per annum until the first of May next. February 2d, 1839. McWhorter & Baldwin. James McMahan.” On the 6th of February the complainants, with their wives, made and acknowledged a deed, and sent it to the defendant, together with a bond and mortgage to be executed by him, pursuant to the terms of the contract; but he being then unwell requested the papers to be left with him by the commissioner. On the 7th of the same month they also sent to him a written notice that they elected to hold the premises as his tenants until the first of May, pursuant to the right reserved to them in the agreement, and at the rent mentioned therein. Four days afterwards the defendant called upon Judge Campbell, by whom the deed and bond and mortgage had been left with him, and signed the bond, and signed and acknowledged the mortgage before him. And the judge endorsed a certificate of such acknowledgment thereon, and left the papers with the defendant, who then avowed himself ready to execute the contract. But he neither delivered the bond and mortgage to the complainants, nor paid the third of the purchase money to them, which was payable on the- first of May, 1839, according to the terms of the agreement. On the contrary, he sent back the deed to the complainants, in the latter part of February j but without making any objection to the form of the deed, or to the description of the premises therein. The complainants relinquished the possession of the premises on the 1st of May, 1839, and sent the key of the store to the house of the defendant, who was absent from home, together with the money to pay the rent up to that time ; but the person who was in charge of the defendant’s business, in his absence, refused to receive the same. On the fifth of September thereafter the complainants filed their bill in this case, for a specific performance, waiving therein a sworn answer from the defendant. The bill stated the substance of the agreement between the parties ; but in attempting to set out the written memorandum of the agreement, at length, the complainants made a slight mistake, by inserting the words u together with the lot in rear of the same” instead of “ together with the lot in rear, or laneP The answer not being on oath, put in issue nearly all the material allegations in the bill; and insisted that the written memorandum was not intended as an agreement, on the part of the defendant, to purchase the premises, but merely as a proposition on the part of the complainants, containing the terms upon which they were willing to sell. The evidence showed, however, that the defendant had frequently, after the signing of the memorandum, spoken of it as an agreement on his part to purchase. No objection to the title of the complainants was stated in the answer. But upon taking the testimony, it was ascertained that at the time of the contract there was an outstanding mortgage upon these premises, and upon other real estate belonging to the complainants, which was still due ; the other property, however, upon which it was a lien, was worth more than the amount of such mortgage. The vice chancellor decided that the contract must be specifically performed if the complainants could make a good title. But as there was a mortgage on the lot, and there being no admission in the answer that the premises in the deed were the same as those described in the written memorandum, he directed a reference to a master to report upon the complainants’ title to the premises, and whether the same were, at the date of such report, free from incumbrances ; and that the master also inquire and report whether the premises described in the deed of the 6th of February, 1839, were the same as those contracted to be sold as described in the written memorandum. And all further directions were reserved until the coming in of the master’s report. From this decretal order the defendant appealed. The memorandum of agreement, for the performance of which this bill was filed, is void by the statute of frauds ; an agreement to be valid must be binding upon all the parties to the same. This contract was signed by Baldwin alone, in the name of the firm of Baldwin & Whorter, who were partners in the mercantile business and joint owners of the land. Baldwin could not bind McWhorter in the partnership name. (2 R. S. 69. Loyd v. Titus, 2 John. 430.) The memorandum contains no promise on the part of the defendant. If the memorandum was binding, the equity of the bill is not sustained by the evidence. It does not appear from the evidence that the defendant ever refused to fulfil the contract. There is no evidence that the complainants ever demanded the papers after the defendant executed them. The contract set out in the bill is different from the contract proved. (5 Wend. 538.) The complainants never gave or offered possession of the store to the defendant; and they never notified him where he could get the key; and they never tendered to him the money they were to pay for rent. The refusal or neglect of the complainants to meet at the office of Dixon & Smith to examine the papers as they had agreed, and their neglect afterwards to notify the defendant of their intentions for nearly three months, is a virtual relinquishment of' the contract by them, and exonerated the defendant. The premises were encumbered by a mortgage to the amount of $2000 and interest, at the time of the filing of the bill, and of the examination before the master. If the case is referred back to a master to take further proofs, the defendant should be permitted to introduce any defence and any proofs he may think proper. If the case is opened for further proofs to enable the complainants to patch up their case, they should be compelled to pay the defendant’s costs, as a condition. There was a sufficient execution of the contract on the part of the complainants within the statute of frauds ; both the complainants being present, and of course consenting to the method of execution. Baldwin wrote the names u McWhorter & Baldwin” to the contract, while McWhorter was present, and consented to it. Baldwin was then his authorized agent to subscribe his name to the contract, and it was his (McWhorter’s) act. (14 Johns. R. 484, and the, cases there cited. 2 Cowen § Hill’s Notes to Phil. Ev. 1268, 1280, 1. 3 Kent’s Com. 47, 48, and notes on same page. Cady v. Shepard, 11 Pick. 400. 1 Chit. R. 787. Skinner v. Dayton, 19 Johns. R. 513. Gram v. Seton, 1 Hall, 262. Mackay v. Bloodgood, 9 Johns. R. 285. 1 Wen. 326. 9 Id. 439. 12 Johns. R. 102.) The subsequent execution of the deed by McWhorter was such a ratification by him of the act of Baldwin, in placing his name to the original contract, as would estop him from denying Baldwin’s authority. And if McWhorter cannot deny Baldwin’s authority, the defendant certainly cannot. At the time the deed was executed, and long afterwards, the defendant treated the contract as a valid and subsisting one. (2 Cowen & Hill’s Notes to Phil. Ev. 1268.) The complainants having complied with the terms of the contract on their part, they are entitled to a specific performance on the part of the defendant. (Brown v. Haff, 5 Paige, 235, 240. Phyfe v. Wardell, Idem, 283, 286, 268. 3 Cowen, 467, 491, 505. Winne v. Reynolds, 6 Paige, 411. Newl. on Cont. 89.) The defendant cannot say he has never refused to perform the contract on his part. He should have averred his readiness to perform. The outstanding mortgage is no objection to a decree for specific performance. The other property covered by the mortgage is sufficient to satisfy- it. And it is sufficient if we remove this incumbrance at the time of the reference to the master to report as to the title. The premises described in the deed are the same as those mentioned in the contract. But no (objection was made when it should have been done, if there was any substantial difference. (6 Paige, 407. 7 Id. 24. 3 Wend. 249.) The defendant’s refusal to perform was not put upon this ground.